U.S. Deauthorizes Accreditor, Sets Off Scramble Among Some For-Profit Schools--Update
24 September 2016 - 12:41PM
Dow Jones News
By Douglas Belkin
A move by the federal government to shut down a major accreditor
of for-profit colleges has set off a mad scramble by the schools to
find another group to vet their status as worthy of receiving
federal student aid.
On Thursday, the government confirmed it is moving ahead with
its plans to revoke the authority of the Accrediting Council for
Independent Colleges and Schools, amid a crackdown on the
for-profit education sector.
The group, known as ACICS, on Friday appealed to the Secretary
of Education to reverse the decision "on the grounds that the
findings and conclusions are arbitrary, capricious, an abuse of
discretion (and) not in accordance with law."
But the chief executive of a rival accreditor on Friday said
many of the schools under ACICS' umbrella aren't sticking around to
find out how that appeal will end up: they are set to begin the
accrediting process with his group next month. Michale S. McComis,
executive director of the Accrediting Commission of Career Schools
and Colleges, which accredits about 800 institutions with over
250,000 students across the country, said his organization has
received more than 200 inquiries from schools formerly accredited
by his competitor and about 125 of them have already started or are
scheduled to begin the accreditation process.
This new game of musical chairs in the accreditation world has
the potential to affect hundreds of thousands of students attending
about 240 schools. Those institutions depend upon the seal of
approval from an accreditor to maintain access to the federal
student loan program, which lends about $130 billion a year to the
nation's college students.
If a school isn't accredited somewhere, students cannot borrow
money from the federal government to pay their tuition.
Enrollment at the largest education chains has plummeted by more
than half in the past five years, amid heightened scrutiny of the
schools' recruiting practices and their failure to deliver on
promised jobs for students. Most notable were the high-profile
closings of Corinthian Colleges Inc. last summer and ITT Technical
Institute earlier this month.
On Thursday, Emma Vadehra, chief of staff to Secretary of
Education John B. King Jr., wrote in a letter that she agreed with
the June recommendations of the advisory board that oversees
accreditors. That report outlined significant problems. "ACICS
track record does not inspire confidence that it can address all of
the problems effectively," she wrote. "Many of the problems are
serious and longstanding."
ACICS Interim President Roger Williams said the group is hopeful
it will ultimately retain its status. "We are confident that if
given the opportunity to do so, we will be able to demonstrate
major reforms and ongoing progress towards compliance with the
Department's recognition criteria," Mr. Williams, said.
Meanwhile, Mr. McComis's ACCSC accredits many vocational schools
and would be the logical place for those formerly accredited by
ACICS to turn, Trace Urdan, a research analyst with Credit Suisse
said.
But that doesn't mean they will pass muster. Mr. Urdan said he
thinks ACCSC will be very tough on the new schools because they
have been tarnished by their association with ACICS. He predicts
about half of the schools will shutter, in part because they won't
be able to find a new accreditor.
"These schools are likely to be toxic now," said Mr. Urdan.
"There is going to be an intensified scrutiny on all of them."
Write to Douglas Belkin at doug.belkin@wsj.com
(END) Dow Jones Newswires
September 23, 2016 22:26 ET (02:26 GMT)
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